Two hedge funds have accused Gurugram-headquartered investor-cum-developer IREO of swindling foreign investors of $1.5 billion, according to a Bloomberg report.

Axon Capital and British billionaire Christopher Hohn’s Children’s Investment Fund Foundation have alleged that IREO, which has a tie-up with Donald Trump-owned The Trump Organisation for a project in north India, siphoned off money by creating a network of shadow companies.

The hedge funds had initially pegged the alleged fraud at around $147 million but the estimate was revised to more than $1 billion following a meeting in a New York hotel on Monday, the report said.

“If we do nothing, we will largely bleed dry and get nothing back,” Axon Capital’s head Dinakar Singh was quoted as saying. He was speaking to 70 investors at the New York meeting.

Email queries sent to IREO, Axon Capital and Children’s Investment Fund Foundation did not immediately elicit a response.

Apart from the two hedge funds, other investors in IREO include Notre Dame University and the University of Rochester, the reported quoted unnamed sources as saying. Stanford University also was an investor in the Indian real estate firm.

A Bloomberg report earlier this month said that Deloitte, which was appointed by Abraaj to examine its finances, found that the Middle Eastern firm had co-mingled its own money in the healthcare fund and its fourth fund owing to a cash shortage. All the money has been accounted for and no evidence of embezzlement was found, although Abraaj still owes $94.6 million to the fourth fund.

Since the dispute went public early this year, Abraaj has split its investment management business and holding company, while its founder Arif Naqvi stepped aside from the day-to-day running of its private equity fund unit and the firm halted its investment activities.

Founded in 2004, IREO has projects across India with a focus on Delhi-NCR, Punjab, Tamil Nadu and Goa.

The IREO portfolio is owned by affiliated investment funds that are backed by global blue chip investors and financial institutions, and these funds have cumulatively invested around $2 billion, according to its website.